Fiat Currency

Fiat currency is money issued by a government and declared legal tender — its value is backed by trust in the issuing government, not by a physical commodity like gold or silver. Examples include the US dollar (USD), Euro (EUR), and Russian ruble (RUB).

Fiat vs. cryptocurrency

Property	Fiat	Cryptocurrency
Issuer	Central bank / government	Decentralized protocol
Supply	Unlimited (can be printed)	Usually capped or predictable
Control	Centralized	Decentralized
Inflation	Determined by monetary policy	Determined by protocol

Relevance to miners

Miners interact with fiat constantly:

• Electricity costs are paid in fiat — this is typically the largest operating expense
• Hardware purchases (ASICs, GPUs) are priced and paid in fiat
• Profitability calculation compares fiat value of mined coins against fiat-denominated costs
• Cashing out — miners sell mined coins on exchanges for fiat to cover expenses

The USD exchange rate of mined coins directly determines whether mining is profitable.

See also

• Cryptocurrency
• Exchange
• Profitability